CAC and LTV calculator
Four inputs — acquisition cost, monthly revenue per customer, gross margin, and churn — become lifetime value, your LTV:CAC ratio, and CAC payback months.
LTV : CAC ratio
3.3 : 1
LTV $4,000 · CAC $1,200
- Customer lifetime33.3 mo
- Monthly margin / customer$120
- Lifetime value (LTV)$4,000
- CAC payback10 mo
Made with marketinque — the demand generation toolkit.
How this calculator works
The calculator turns four inputs into a unit-economics readout. Customer lifetime is estimated as 1 ÷ monthly churn, so 3% churn implies about 33 months. Monthly margin per customer is average monthly revenue × gross margin. Lifetime value (LTV) is that monthly margin carried across the lifetime, and the two headline figures follow: the LTV : CAC ratio, and CAC payback — the months of margin it takes to earn back what you paid to acquire the customer.
Use a fully loaded customer acquisition cost: total sales and marketing spend for a period, including salaries and tools, divided by the new customers won in that period — not just ad spend. The margin field is what keeps the model honest: a customer’s revenue is not what you can re-spend on acquisition; their contribution after the cost of serving them is.
What good looks like: the classic SaaS target is a 3 : 1 ratio with payback under about 12 months. Below 1 : 1 you lose money on every customer — cut CAC or fix retention before spending more. Between 1 and 3 the machine works, but thinly. Above roughly 5 : 1 the verdict flips the other way: you may be under-investing in growth. And because churn drives the lifetime estimate, retention compounds — dropping monthly churn from 3% to 2% extends the modeled lifetime by half.
Frequently asked questions
What should I include in CAC?
A fully loaded number: total sales and marketing spend for a period — salaries, tools, agencies, and media — divided by new customers won in the same period. Ad spend alone flatters the ratio and hides the real cost of acquisition.
Why is gross margin part of LTV?
Revenue is not what you can re-spend on acquisition; contribution after the cost of serving the customer is. Margin-adjusting LTV keeps the ratio honest — especially for products with hosting, support, or fulfillment costs.
What is a good LTV:CAC ratio?
The classic SaaS target is 3:1 with payback under about 12 months. Below 1:1 you lose money on every customer. Above roughly 5:1 you may be under-investing in growth that would pay for itself.
How accurate is lifetime = 1 / churn?
It is a simple geometric approximation that assumes churn stays flat. Real cohorts often flatten over time, so it can understate LTV for products whose retention improves with tenure. Treat it as a conservative floor.
Improve the ratio, not just measure it
marketinque works the stages that move LTV:CAC — capture, nurture, onboarding, retention — as one governed system, with every publish and send held for your approval.
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